EDI in South Africa : An assessment of the costs and benefits

Abstract

EDI is a method of exchanging common business documentation between organisations by replacing paper transactions with electronic messages. The use of EDI can eliminate or significantly reduce the problems associated with paper-based transmission systems. EDI can provide substantial benefits: improved efficiency and reduced costs: improved internal operations resulting from a reduction in time delays; better responsiveness to customers; improved channel management; and increased ability to compete both domestically and internationally. The aim of this research is to assess the degree to which the benefits of EDI are currently being realised in South Africa. In addition, the cost of EDI is addressed, focusing on the various cost elements that must be considered and the factors which impact the level of cost. Ultimately, the cost of implementing EDI on various platforms is estimated. The research results suggest that the majority of industries surveyed are realising some degree of benefit from EDI. It appears that the mid-range EDI applications are generating the most benefit, while stand-alone PC implementati.ons are not delivering any benefit. The results indicate that the benefits being realised to the greatest extent are the improvement of data integrity, followed by the achievement of closer trading partner relationships. The benefits that are being realised to a•lesser degree are the reduction in inventory lwldings,facilitation of JIT production, improved supplier responsiveness, decreased mailing costs, reduced fonns and stationery expenses, and the optimal utilisation of staff.